Research Reports
Reflections on Traditional American Indian Ways, 1998
Threats to Tribal Sovereignty, 1998
Traditional American Indian Leadership: A Comparison with U.S. Governance, 1997
Section Four: Home Ownership & the Mortgage Lending Process
Conversations with American Indian community members and housing providers.
- Theme One: Understanding the Process
- Theme Two: The Application Process
- Theme Three: Loan Officers Fight for Applications
Theme One: Understanding the Process
For many American Indian people, the concept of home ownership is riddled with complexities about personal credit, mortgages and the lending process, and tax and maintenance responsibilities. These complexities influence the choices American Indians make regarding home ownership. Some of these issues were offered by roundtable participants.
"For example, all houses and apartments have mortgage loans, therefore, someone is owning the property."
"I had to fully understand that I could sell the home (house) before buying it."
"In my own personal situation, I didn't own a home for a long time-not until I comprehended that I could get out of this thing by selling it. It is such a long term commitment. I needed to understand how owning permits equity in the house so you don't lose anything. It was hard to understand what owning a house meant."
"I don't want to go to bank until I know I won't be turned down. We need an Indian bank so that money doesn't keep going to white America.
(Who is framing the questions? White people. Who benefits from the loans? White people. When is Indian country going to benefit from people being home owners?)"
Theme Two: The Application Process
The Community Reinvestment Act requires banks and other lending agencies to disclose where and to whom they are lending for home mortgages. The data that is compiled is found within the Home Mortgage Disclosure Act (HMDA). Information about each individual loan applicant is collected through a confidential form attached to loan applications. Loan officers for banks and lending institutions are not privy to this information. However, many community members feel that some information such as the neighborhood location of the house to be purchased can disclose a person's race and income status to a substantial degree. This is particularly prevalent in long-standing Indian communities within the Twin Cities area.
While loan officers are not allowed to view HMDA data at an individual level or during the application process, face to face contact when a person applies for a loan could sway the outcome of the application if the loan officer is acting on any prejudices he or she may have. However, many people of American Indian decent may be able to "pass" as white during the application process. Several roundtable participants discussed their own personal experiences with application processes and the disclosure of personal information.
"Sometimes I will check "Indian" when it seems ok, otherwise I will check white if think it will be used against me. Sometimes I check nothing or check both."
"I didn't put my ethnic background down on the loan application even though there were other characteristics that would identify me."
"I didn't disclose that I was American Indian on my form. I was afraid I'd be turned down. It was also an economic thing for me. It's cheaper to buy in North Minneapolis than Edina [meaning that buying in North Minneapolis may identify your background, etc.]."
"There are many Indian people who can say they are not Indian. There was a person two weeks ago, clearly Indian to me but visually she could pass as non-Indian. When she got down to the box of racial category, she really wanted that home more than anything else, she didn't check the American Indian box. I don't know whether it was just her perception or piece of knowledge she possessed."
"Another participant said she sometimes checked both racial categories (white and American Indian) at same time."
"My brother and I are attempting to buy a house. It may not make a difference marking what race you are. His income is per capita which reveals his source of income from the reservation. When we buy a home, we know our family will be there in the future-our children and relatives. The community should know how to pool its resources; it has helped me and my brother."
"Another example of how situations may reveal backgrounds is gaps in credit history (i.e. chemical dependency problems) and having to explain it."
Theme Three: Loan Officers Fight for Applications
Personal credit is probably the most significant factor for determining the outcome of a loan application. However, not all loan applicants have perfect credit histories. Eighty percent (80 percent) of successful white applicants have blemished credit records. Why are these applicants receiving loans with blemished records? The most prevalent answer is that loan officers fight for applications within the lending process if they feel the applicant will be a worthy credit risk in the future regardless of their past.
"Loan officers often fight for applications. If a loan officer isn't comfortable with an applicant, then he or she probably won't fight for the application. I've been in housing industry for 25 years. The most important ingredient is when a loan officer is willing to fight for the applicant. My loan officer fought for me. My credit history was a rocky road - I paid eventually. When the bills get a foot high, I pay them. He figured I would pay my bills and my mortgage and fought for me."
"If an Indian person goes into a bank and sees no Indian people there, he or she asks themselves who would fight for me and why should I trust it here. They [loan officers] want to look at everything. They want to look at my underwear drawer."
"That's why I asked [earlier] if there was distinction between African American and Native American applicants. It appears African Americans are in the system now, but I don't know if there are Indians in the system. That's part of how I feel."
Note: A further course of action could be to determine the number of Indians or non-Indians, who are knowledgeable of Indian culture and experiences, working for lending institutions.
The
Well-Being of American Indian Children in Minnesota: Economic Conditions,
1994
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